KKR Reinforces Fee Growth and Credit Caution at BofA Conference

What happened

KKR presented at the Bank of America Financial Services Conference 2026, likely detailing its scaled alternative asset management platform with $556B in fee-paying AUM. The discussion probably highlighted recent successes, such as the $2.5B Asia private credit fund close, to underscore fundraising momentum amid a shift toward credit and perpetual capital. However, management had to address rising credit default risks, with the Proskauer index at 2.46% in Q4 2025, and negative optics from retail drawdowns like a KKR-linked BDC down 33% in 2025. Key emphasis was placed on the retail distribution expansion via the Capital Group partnership, including the pending Equity+ interval fund launch by May 2026. The presentation reinforced the existing narrative but did not introduce new catalysts or alter the fundamental risk-reward balance.

Implication

KKR's conference presentation confirms the crowded investment thesis centered on fee-paying AUM growth and retail distribution, but it fails to mitigate the critical downside risks. The stock's path depends heavily on containing credit defaults below 3.0% by mid-2026 to avoid a bear case scenario of $80, while timely execution of the Equity+ launch is essential for the bull case. Fundraising momentum must continue with additional credit closes to sustain the high FRE margin of 69%, but high valuation multiples and net debt concerns limit margin of safety. Retail optics remain a vulnerability, as further drawdowns could impair the retirement channel expansion and compress the fee multiple. Given the unchanged probability weights in the base, bear, and bull scenarios, investors should avoid new positions until clearer signals emerge from the upcoming 3-6 month checkpoints.

Thesis delta

The presentation does not materially shift the investment thesis; it merely reiterates the existing WAIT rating and its dependencies. No new data or guidance alters the probability of scenarios, keeping the thesis anchored to the Equity+ launch timing and default index trends. Investors should continue monitoring these gates without adjusting their stance based on this event.